Winnebago Industries, Inc. reported profits fell 50.9 percent in its fiscal third quarter ended May 25 as sales declined 12.7 percent. 

Third Quarter Fiscal 2024 Financial Summary

  • Revenues of $786.0 million
  • Gross profit of $118.2 million, representing 15.0 percent gross margin
  • Diluted earnings per share of $0.96; adjusted diluted earnings per share of $1.13
  • Adjusted EBITDA of $58.0 million, representing 7.4 percent adjusted EBITDA margin
  • Cash and cash equivalents of $318.1 million at quarter-end, up 2.6 percent from year-end fiscal 2023

Michael Happe, president and chief executive officer, commented, “While outdoor industry market conditions remain challenged given inconsistent retail patterns and sustained dealer discipline relative to field inventory levels, we are generally pleased with the resiliency of our portfolio, as our teams balance the pursuit of long-term share, profitability and customer satisfaction across our premium brands.

“Driven by our Towable RV and Marine segments, we delivered sequential consolidated margin growth in the third quarter. Notwithstanding difficult retail headwinds in the Motorhome segment, our Towable RV business generated higher revenue versus the same period a year ago and our Barletta pontoon retail share grew to double digits for the trailing three- and six-month periods through April. We are also pleased to have returned more than $29 million to investors this quarter through share repurchases and dividends while maintaining investments in future growth initiatives and managing a healthy balance sheet.

“The combination of affordability and innovation remains a focal point of product development at Winnebago Industries—valued differentiation on respected brands our consumers can trust,” continued Happe.”Recent introductions of economical travel trailers from our Grand Design and Winnebago brands, plus continued market penetration with the opening price Aria line within our Barletta business, are evidence of this focus. We are also particularly excited about the upcoming market release in our fourth quarter of the Grand Design Lineage motorhome product as well as the Winnebago Connect intelligent control system being introduced on the Winnebago Navion line. Both strategies open new growth opportunities for our organization.”

Third Quarter Fiscal 2024 Results
Revenues were $786.0 million, a decrease of 12.7 percent compared to $900.8 million in the third quarter of last year, driven by product mix and lower volume related to market conditions.

Gross profit was $118.2 million, a decrease of 22.0 percent compared to $151.4 million in the third quarter of last year. Gross profit margin decreased 180 basis points in the quarter to 15.0 percent due to deleveraging, operational efficiency challenges and higher warranty expense due to a favorable prior year trend, partially offset by cost containment efforts.

SG&A expenses were $69.1 million, an increase of 3.7 percent compared to $66.5 million in the third quarter of last year, driven by strategic investments in engineering, digital asset development and increased data and information technology capabilities.

Operating income was $43.5 million, a decrease of 46.0 percent compared to $80.5 million in the third quarter of last year.

Net income was $29.0 million, compared to net income of $59.1 million in the third quarter of last year. Reported earnings per diluted share was $0.96, compared to reported earnings per diluted share of $1.71 in the same period last year. Adjusted earnings per diluted share was $1.13, a decrease of 46.9 percent compared to adjusted earnings per diluted share of $2.13 in the third quarter of last year.

Consolidated Adjusted EBITDA was $58.0 million, a decrease of 39.8 percent, compared to $96.4 million last year.

“We have made strong progress during the fiscal year to reduce aging RV field inventory in a fiscally responsible manner; our teams continue to work closely with our dealer partners to monitor the complexion of their inventory and match production and shipments with retail demand,” Happe said. “This discipline extends to our Marine segment as well, where we have particularly emphasized dealer inventory health and aggressively positioned ourselves well for the upcoming model year 2025 rollout. Overall, while the challenges of today require constant diligence to navigate, our company and brands are stronger than ever before, and with ongoing investments in product, people, systems, and capabilities like digital connectivity, we are well situated to grow profitably as the cycle turns more positive in the future.”

Towable RV

(1) Amounts are calculated based on unrounded numbers and may not recalculate using the rounded numbers provided by the company.

  • Revenues for the Towable RV segment were up compared to the prior year, primarily driven by an increase in unit volume, partially offset by a reduction in average selling price per unit related to product mix.
  • Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to operational efficiency challenges, partially offset by lower discounts and allowances. In addition, results for the third quarter of fiscal 2023 benefited from a favorable warranty expense trend, which did not recur in the third quarter of fiscal 2024.
  • Backlog decreased due to current market conditions and a cautious dealer network.

Motorhome RV

(1) Amounts are calculated based on unrounded numbers and may not recalculate using the rounded numbers provided by the company.

  • Revenues for the Motorhome RV segment were down from the prior year due to a decline in unit volume related to market conditions and higher discounts and allowances, partially offset by price increases related to higher motorized chassis costs.
  • Segment Adjusted EBITDA margin decreased compared to the prior year, primarily due to deleverage and operational efficiency challenges, partially offset by cost containment efforts.
  • Backlog decreased due to current market conditions and a cautious dealer network.
  • Marine

(1) Amounts are calculated based on unrounded numbers and may not recalculate using the rounded numbers provided by the company.

Balance Sheet and Cash Flow
As of May 25, 2024, cash and cash equivalents totaled $318.1 million. The company had a total outstanding debt of $695.4 million ($709.3 million of debt, net of debt issuance costs of $13.9 million) and working capital of $581.9 million. Cash flow provided by operations was $99.4 million in the fiscal 2024 third quarter.

Quarterly Cash Dividend and Share Repurchase
On May 15, 2024, the company’s Board of Directors approved a quarterly cash dividend of $0.31 per share, payable on June 26, 2024, to common stockholders of record at the close of business on June 12, 2024. Winnebago Industries executed share repurchases of $20 million during the third quarter.

Image courtesy Winnebago